Why Did My Stock Stop Trading?

October 4, 2010

One of the best characteristics of stocks is that they are almost always easy to trade. If you want to buy or sell some stock, all it takes is a couple mouse clicks or a brief telephone conversation with your broker. But there are times when a stock you’re trying to buy or sell isn’t accepting orders.

A stock may stop trading temporarily if there’s important pending news or if trading has been volatile enough to set off “circuit breakers”. You can read more about halts on the Securities and Exchange Commission’s website: www.sec.gov/answers/tradinghalt.htm.

Usually trading is resumed in less than an hour after the market has a chance to digest the news and buy and sell orders are aligned with the new price. However, there are times when a stock is suspended by the SEC for up to 10 days. The SEC may suspend a stock when it feels the public is being harmed or potentially misled by inaccurate information.

There’s also the case that a stock may be permanently booted from a major stock exchange in a process called delisting. Stocks can be delisted for many reasons, but most often when the stock price falls below $1 for an extended time.

In this occurrence, the shares will usually resume trading on a less formal market, such as the Pink Sheets or OTC Bulletin Board. In this case, if you want to sell, you can tell your broker to sell your shares there.

As you can see, a stock can stop trading for a number of reasons. If a stock is halted, you will have to wait until after the SEC releases the suspension before you can make a move. If you don’t know why your stock isn’t trading, your brokerage firm should be able to tell you.